The spending watchdog today raises new concerns about the government's health reforms, warning that in the short term costs will rise and the quality of services could fall.

The National Audit Office (NAO) took the unusual step of setting out a series of warnings about the radical shake-up, suggesting that the overhaul could overwhelm the NHS in England if not handled properly.

The reforms, announced on Wednesday, will see 24,000 management jobs cut and will allow, for the first time, NHS hospitals to chase as many private patients as they want if the money is "demonstrably" ploughed back into the health service.

England's 152 primary care trusts, which plan services and decide how money should be spent, will be abolished and GPs will commission services directly. The reforms have been described as more significant than the 1948 Act which established the NHS.

The carefully worded NAO report adds to a growing chorus of concerns about the reforms, with nearly every group representing doctors and other healthcare workers warning against the scale of the changes.

The health secretary, Andrew Lansley, has acknowledged that the scheme will cost £1.4bn to implement, but the NAO report notes that in previous major reorganisations of government departments there have been "recurring issues of weak cost control".

It also warns that GPs could be distracted from providing patient care during the transition process as they work to set up the direct commissioning process, while PCTs could "cease to function effectively" as staff leave for other jobs.

The NAO suggests that the management of the process will be crucial: "Our work has identified a number of undesirable results which follow from poor risk management: poorly thought-through plans, unrealistic timetables, weak controls, delays in delivery and wasted money."

It highlights concerns about whether the health system will remain accountable to parliament once the system is devolved and there is "no single national headquarters for the NHS".

Separately last night, Margaret Hodge, the chair of the Public Accounts Committee, warned that government reforms to the Whitehall governance system, with the introduction of non-executive members from the private sector to departmental boards, could threaten the accountability mechanisms to parliament.

In a wide-ranging speech on public spending control, she also made stark admissions about the failure of the Labour government to control spending. The former Labour minister said: "During the era of expansion in public expenditure between 2000 and 2010 the emphasis was never really sufficiently focused on value for money – people sought to stay within budgets and achieve the targets they were set, but efficiency, despite high profile initiatives by the Labour government, was a lesser priority.

"A perception that money was spent without maximizing value damaged the credibility of public services. Notably for politicians on the left, that loss of credibility is of particular concern, because of the important role we see for the state in our society. So establishing greater confidence in the worth and value of public spending by focusing on value for money, matters to politicians like me on the left."